ASX:CAR

Stock Analysis Report

Executive Summary

carsales.com Ltd engages in online automotive, motorcycle, and marine classifieds business primarily in Australia.


Snowflake Analysis

Established dividend payer with reasonable growth potential.

Share Price & News

How has carsales.com's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CAR's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.4%

CAR

-2.9%

AU Interactive Media and Services

2.8%

AU Market


1 Year Return

-9.7%

CAR

-2.1%

AU Interactive Media and Services

-16.2%

AU Market

Return vs Industry: CAR underperformed the Australian Interactive Media and Services industry which returned -6.8% over the past year.

Return vs Market: CAR exceeded the Australian Market which returned -19% over the past year.


Shareholder returns

CARIndustryMarket
7 Day-0.4%-2.9%2.8%
30 Day-27.1%-21.7%-15.2%
90 Day-32.3%-29.7%-23.4%
1 Year-6.7%-9.7%-0.5%-2.1%-12.4%-16.2%
3 Year14.8%4.4%24.9%18.4%-0.2%-13.9%
5 Year38.2%17.4%58.4%44.3%11.5%-13.6%

Price Volatility Vs. Market

How volatile is carsales.com's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is carsales.com undervalued compared to its fair value and its price relative to the market?

27.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CAR (A$11.69) is trading below our estimate of fair value (A$16.34)

Significantly Below Fair Value: CAR is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CAR is good value based on its PE Ratio (19.7x) compared to the Interactive Media and Services industry average (20.6x).

PE vs Market: CAR is poor value based on its PE Ratio (19.7x) compared to the Australian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: CAR is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: CAR is overvalued based on its PB Ratio (8.8x) compared to the AU Interactive Media and Services industry average (2x).


Next Steps

Future Growth

How is carsales.com forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

12.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAR's forecast earnings growth (12.6% per year) is above the savings rate (1.1%).

Earnings vs Market: CAR's earnings (12.6% per year) are forecast to grow faster than the Australian market (10% per year).

High Growth Earnings: CAR's earnings are forecast to grow, but not significantly.

Revenue vs Market: CAR's revenue (9% per year) is forecast to grow faster than the Australian market (4.1% per year).

High Growth Revenue: CAR's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAR's Return on Equity is forecast to be very high in 3 years time (45.7%).


Next Steps

Past Performance

How has carsales.com performed over the past 5 years?

10.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CAR has high quality earnings.

Growing Profit Margin: CAR's current net profit margins (34.1%) are lower than last year (46.7%).


Past Earnings Growth Analysis

Earnings Trend: CAR's earnings have grown by 10.8% per year over the past 5 years.

Accelerating Growth: CAR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CAR had negative earnings growth (-18.3%) over the past year, making it difficult to compare to the Interactive Media and Services industry average (5.3%).


Return on Equity

High ROE: Whilst CAR's Return on Equity (45.16%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is carsales.com's financial position?


Financial Position Analysis

Short Term Liabilities: CAR's short term assets (A$201.2M) exceed its short term liabilities (A$93.5M).

Long Term Liabilities: CAR's short term assets (A$201.2M) do not cover its long term liabilities (A$576.7M).


Debt to Equity History and Analysis

Debt Level: CAR's debt to equity ratio (152.2%) is considered high.

Reducing Debt: CAR's debt to equity ratio has increased from 113.7% to 152.2% over the past 5 years.

Debt Coverage: CAR's debt is well covered by operating cash flow (29.1%).

Interest Coverage: CAR's interest payments on its debt are well covered by EBIT (14.5x coverage).


Balance Sheet


Next Steps

Dividend

What is carsales.com's current dividend yield, its reliability and sustainability?

4.02%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CAR's dividend (4.02%) is higher than the bottom 25% of dividend payers in the Australian market (3.17%).

High Dividend: CAR's dividend (4.02%) is low compared to the top 25% of dividend payers in the Australian market (8.1%).


Stability and Growth of Payments

Stable Dividend: CAR's dividends per share have been stable in the past 10 years.

Growing Dividend: CAR's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79.3%), CAR's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CAR's dividends in 3 years are forecast to be covered by earnings (70.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Cameron McIntyre (48yo)

3.25s

Tenure

AU$1,778,857

Compensation

Mr. Cameron McIntyre has been the Chief Executive Officer and Managing Director of carsales.com Ltd since March 17, 2017. Mr. McIntyre served as the Chief Operating Officer of carsales.com Ltd from October ...


CEO Compensation Analysis

Compensation vs Market: Cameron's total compensation ($USD1.07M) is below average for companies of similar size in the Australian market ($USD1.75M).

Compensation vs Earnings: Cameron's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Cameron McIntyre
MD, CEO & Director3.25yrsAU$1.78m0.094% A$2.7m
Walter Pisciotta
Co-Founder & Non Executive Director23.83yrsAU$142.50k3.6% A$102.0m
Ajay Bhatia
Managing Director of Australia3.08yrsAU$1.05m0.00046% A$13.0k
Paul Barlow
Managing Director of International3.08yrsAU$792.44k0.017% A$468.7k
William Elliot
Chief Financial Officer0.50yrno datano data
Jason Blackman
Chief Information Officer3.08yrsno datano data
Nicole Birman
General Counsel & Company Secretary5.5yrsno datano data
Will Clarke
Communications & PR Managerno datano datano data
Kellie Cordner
Chief Marketing Officer3.08yrsno datano data
Jo Allan
Chief People Officer2.33yrsno datano data

3.1yrs

Average Tenure

Experienced Management: CAR's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Cameron McIntyre
MD, CEO & Director3.25yrsAU$1.78m0.094% A$2.7m
Walter Pisciotta
Co-Founder & Non Executive Director23.83yrsAU$142.50k3.6% A$102.0m
Patrick Redmond O'Sullivan
Independent Chairman1.25yrsAU$279.81k0.0095% A$268.6k
Kim Elizabeth Anderson
Independent Non-Executive Director9.83yrsAU$190.00k0.0062% A$175.8k
Steven Kloss
Alternate Non-Executive Director14.5yrsno data1.13% A$32.0m
Edwina Gilbert
Non-Executive Director4yrsAU$180.83k0.011% A$298.0k
David Wiadrowski
Non-Executive Director0.92yrAU$22.94k0.0014% A$40.5k
Kee Wong
Non-Executive Director1.75yrsAU$153.85k0.0052% A$147.7k

3.6yrs

Average Tenure

57.5yo

Average Age

Experienced Board: CAR's board of directors are considered experienced (3.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CAR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

carsales.com Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: carsales.com Ltd
  • Ticker: CAR
  • Exchange: ASX
  • Founded: 1997
  • Industry: Interactive Media and Services
  • Sector: Media
  • Market Cap: AU$2.830b
  • Shares outstanding: 245.27m
  • Website: https://www.carsales.com.au

Number of Employees


Location

  • carsales.com Ltd
  • 449 Punt Road
  • Level 4
  • Melbourne
  • Victoria
  • 3121
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CARASX (Australian Securities Exchange)YesOrdinary SharesAUAUDSep 2009
WN6DB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 2009
CARCHIA (Chi-X Australia)YesOrdinary SharesAUAUDSep 2009
CSSS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 2009
CSXX.YOTCPK (Pink Sheets LLC)UNSPONSOD ADRUSUSDFeb 2012

Biography

carsales.com Ltd engages in online automotive, motorcycle, and marine classifieds business primarily in Australia. It operates in Online Advertising Services; Data, Research and Services; Latin America; and Asia segments. The Online Advertising Services segment offers classified advertising that allows dealers and consumers to advertise automotive and non-automotive goods and services for sale across the carsales network; and services, including subscriptions, lead fees, and priority placement services on automotive and non-automotive Websites. It also provides display advertising services, such as placing advertisements on carsales network Websites for corporate customers comprising automotive manufacturers/importers, and finance and insurance companies. In addition, this segment holds investments in tyresales.com.au, an online tire retailer that allows consumers to transact and purchase tires; and RedBook Inspect, which provides inspection services published online as part of classified advertisements. The Data, Research and Services segment offers software, analysis, research and reporting, valuation, and Website development and hosting services, as well as photography services to manufacturers/importers, dealers, industry bodies, and finance and insurance companies. The Latin America segment is involved in the online automotive classifieds activities. The Asia segment provides online automotive classifieds and automotive data services. carsales.com Ltd was founded in 1997 and is headquartered in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 10:35
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.